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Asset Building: Policy Development in Local, State, National Levels A Summit: Pathways to Positive Wealth Creation Programming Gena S. Gunn Center for Social Development Washington University, St. Louis, MO

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Asset Building: Policy Development in

Local, State, National Levels

A Summit: Pathways to Positive Wealth Creation Programming

Gena S. Gunn

Center for Social Development

Washington University, St. Louis, MO


A Working Definition of “Asset-Building Policies”

Policies created at the local, state and federal levels, intended to

afford opportunities for individuals and families to build

wealth, improving personal, local, state, and national

economies. These policies, typically supported through the tax

code, encourage wealth-building by allowing the purchase or

funding, over time, of such high return assets as homes,

businesses, and higher education. Many of these policies reflect

a general paradigm shift toward individual account systems.


Selected Asset-Building Policies for the Non-Poor (<$300 billion per year)

  • Tax advantages on 401(K), 403(B), and like retirement accounts
  • IRAs, Super IRAs, and Roth IRAs
  • Tax deductions for interest paid on home mortgages and equity accounts
  • Tax deductions for charitable contributions
  • Child Tax Credits
  • Tax credits (historic preservation, contributions, etc.)
  • State College Savings Plan (529) Investment Accounts
  • Various other tax advantaged investments
  • Medical Savings Accounts
  • Other employer benefits, such as educational tuition and expenses

Selected Asset-Building Policies for the Poor (>$5 Billion per year)

  • Earned Income Tax Credit (EITC) (better, but still highly underutilized)
  • Job Corps “Living Adjustment” accounts
  • Full Employment Programs (TANF/Jobs Programs) with Savings (fewer than 5, nationally)
  • Housing and Urban Development FSS Section 8 Escrow Accounts (highly underutilized)
  • Federal Home Loan Bank Affordable Housing Programs and Accounts
  • Temporary Assistance for Needy Families IDAs
  • Office of Refugee Resettlement IDAs
  • Assets for Independence Act IDAs (highly underutilized)
  • Workforce Investment Act ITAs (highly underutilized)
  • State College Savings Plan (529) Matched Accounts (fewer than 5 states offer matches)
  • Social Security Income PASS Accounts (highly underutilized)

What are IDAs and why are they directed at the poor?

  • Matched savings accounts
  • Intended uses include purchases of homes, businesses, education
  • Match moneys come from public and private sources
  • Concept created by Michael Sherraden, in 1991, inAssets and the Poor: A New AmericanWelfare Policy, intended to be part of a universal system
  • Originally suggested as universal policy, established at birth (UK model)
  • First programs established in 1991, state policy 1993, Federal policy 1998
  • In demonstration mode focus switched to low-income adults – short term
  • State and Federal IDA policies to date also established for short term program framework only – may be problematic to change

Selected State- and Sovereignty-Related Sources of Support for IDAs

  • State Housing Trust Funds
  • Small Cities Community Development Block Grant Funds
  • City Mandated Funds and City/County Discretionary Funds
  • Community Services Block Grant Funds
  • State Tax Credits
  • State General Revenue Funds
  • State Earned Income Tax Credits (EITC)
  • Tribal TANF Funds
  • Tribal NAHASDA (Housing) Funds
  • Tribal General Funds

State IDA Policy Picture in 1993

  • 1 state had legislated IDAs (Iowa)
  • No states had included IDAs in welfare plans
  • Only 2 states (besides Iowa) proposed IDA legislation
  • Only 3 known (unrelated) community-based IDA programs existed: located in Indiana, Montana, and Mississippi
  • No federal legislation had passed (1 bill was written, but not yet proposed)

State IDA Policy Picture in 2004

  • 35 states have legislated IDAs (plus D.C. and Puerto Rico)

Most bills were bipartisan and passed between 1997 & 2000

  • 6 states support IDA programs through administrative rulemaking
  • IDAs included in federal welfare reform law of 1996:
  • 30+ states include IDAs in welfare (TANF) plans
  • 6 states are positioned to propose or pass IDA legislation – legislation becoming more inclusive; growing interest from tribes(*)

State IDA Policy Picture in 2004

  • 500 + community-based IDA programs in all 50 states including 13+ IDA programs in Native American communities
  • 1 state has legislation for Children’s Saving Accounts
  • 24 state supported IDA programs (plus Puerto Rico)
  • 11 state level collaborative IDA programs without state support
  • 7 states are legislated for IDAs and without an IDA program
  • 1 state has legislation creating an asset-building task force
  • 1 state Governor commissioned an asset-building task force

Proposed Federal Asset Policy Legislation

  • SWFA – proposed federal legislation for IDA tax credits (2001)
  • New Homestead Act - proposed federal legislation (2002)
  • ASPIRE – proposed federal legislation for IDA accounts at birth (2004)

International IDA and Other Savings Initiatives

  • Canada – Individual Development Accounts – 1997
  • Taiwan – Family Matched Savings Account - 2000
  • Singapore – Children Savings Program – 2001
  • United Kingdom – Savings Gateway 2001 (England only)

– Children’s Trust Fund Accounts 2003

  • Australia, Africa, China, France, Mexico, Ireland, Scotland, South Africa

IDA and Asset-Building Coalitions

  • 29 State Coalitions
    • Formed or forming
    • Formal and informal
  • Specific focus on IDAs and asset-building

Focus of Coalitions

  • IDA program driven
    • Developed through community-based organizations
      • micro-enterprise, housing, state trade associations, workforce development or non-profits groups

Focus of Coalitions

  • IDA program driven (continued)
    • IDA specific
    • Collaboration of services
    • Program development, implementation, and technical assistance
    • Funding sources
    • IDA policy
      • State IDA legislation
      • Connecting state and federal programs and policies
        • Sub-committees to carry out specific tasks

Focus of Coalitions

  • IDA and asset-building policy driven
    • Developed by IDA and asset policy advocates
      • Directed to state and federal lawmakers
      • Governor or treasurer task force

Focus of Coalitions

  • IDA and asset-building policy driven (con’t)
    • Comprehensive statewide asset-building strategy
      • Critical issues identified:
        • Connection of state and federal policies
        • Accumulation of assets
        • Leverage of assets
        • Protection of assets

State IDA and Asset Policy Coalitions

  • Delaware – Governor appointed Financial Independence task force
  • Missouri and Kansas – MOKANSave bi-state asset policy coalition
  • California – Asset Policy Initiative of California
  • Illinois – Planning statewide asset-building initiative and have convened statewide meetings specific to financial education and asset-building

State IDA and Asset Policy Coalitions

  • Florida – FlorIDA and Asset Building Coalition
  • Hawaii – Statewide asset-building conference and report
  • Massachusetts– Proposed legislation for the creation of a task force to address asset-building policy
  • New Mexico – Legislation passed creating an asset-building task force
  • Pennsylvania – Governor’s Task Force for Working Families
  • Other states forming – Utah, Idaho, Connecticut, and Alaska


  • The Governor of Wisconsin's budget, for 1999-2001, contained a passage stating that the Department of Workforce Development was authorized to establish a Program of IDAs.
  • The Wisconsin Community Action Association (WISCAP), United Migrant Services (UMO), and the Office of Refugee Resettlement (ORR) supports the IDA Program with 12 member agencies are funded from a variety of sources, including CSBG discretionary funds, TANF funds (obtained locally), Assets for Independence Act grant funds, and Office of Refugee Resettlement grant funds.
  • Wisconsin does not have IDA legislation. WISCAP has taken the lead on developing and supporting proposed IDA legislation in the past.
  • The state IDA program is not supported monetarily by the state.

A More Universal Approach to Asset-Building Policies

  • Has the state set goals for developing asset-building policies? (Is there an inclusive state plan for asset-building policy development?)
  • Could current state asset-building policies connect to federal asset-building policies? How could this be done?
  • Are current asset-building designed to be short-term or long-term? Why?
  • Have potential state and federal funding streams for asset-building policies been identified? Are state agencies and departments communicating?
  • Do projected benefits of implementing asset-building policies justify projected costs? How could this be determined?

Selected State IDA Policy Resources

  • Center for Social Development’s web page: - go to “State Assets Policy” from the main menu.
  • Edwards, Karen and Rist, Carl (2001). State IDA Policy Guide: Published jointly by the Corporation for Enterprise Development and the Center for Social Development.
  • Gunn, Jacobs, Lewis (2003). Tax Credits and IDA Programs, Report, CSD.
  • Grinstein-Weiss, Schreiner, Clancy, Sherraden, (2001). Family Assets for Independence in Minnesota Research Report, CSD.
  • Edwards, Mason, (2003). State Policy Trends for Individual Development Accounts in the United States, 1993-2003, Report, CSD.

Selected State IDA Policy Resources

  • King, Edwards, Hicks, Larson (2003). American Indians Tribal Communities and Individual Development Account (IDA) Policy, Report, CSD.
  • First Nations Development Institute: Two reports on the FNDI Tribal IDA Project and a Tribal/IDA Handbook.
  • Stein, Friedman (2003). Children’s Development Accounts: The Oregon Story, Report, CSD.
  • Zdenek, Stein (2003). Recommendations From the Field: Individual Development Accounts as Part of a Universal Asset-Building System, Report, CSD.
  • Beverly, Dailey (2003). Using Tax Refunds to Promote Asset-Building in Low-Income Households: Program and Policy Options, Report, CSD.
  • Shreiner, Clancy, Sherraden, (2002). Savings Performance in the AmericanDream Demonstration,Final Report,CSD.

Selected State IDA Policy Resources – Coming Soon

  • TANF and IDAs; A Multi-State Study, 2005,Report, CSD.
  • Workforce Investment Act ITAs and IDAs, 2005, Report, CSD, CLASP
  • FHLB Affordable Housing Program and IDAs: A Study, 2004, Report, CSD
  • Rural Asset-Building Policies: Opportunities and Challenges, 2004,Report, CSD.
  • The Case for Assets Policies for People With Disabilities, 2004-2005, Journal Article.
  • Policy Brief Series: Selected CSD reports

State and Other Asset Building Resource Websites


New America Foundation

Corporation for Enterprise Development

Task Force for Working Families

Commonwealth of Pennsylvania--Department of Banking|